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What Apple’s latest updates signal for its services push

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By The Drum Team | Editorial

June 15, 2016 | 12 min read

Apple’s Worldwide Developer Conference may have underwhelmed analysts but hidden behind the updates are some important strategic moves for the company’s pivot into the software space. The Drum has picked out the five takeaways every marketer should know.

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Apple eyes last-mover advantage in mobile messaging game

Apple is rarely first the market with its products, it often opts to focus on design and user experience before rushing to get out the gate. It’s taken this approach with everything from iPods to iPhones which both arguably relaunched their respective industries on their own terms.

When it comes to the mobile messaging game the tech giant has taken a similar approach, relying on the last mover advantage to secure success in an already crowded space.

There’s no denying that Apple is borrowing some ideas from the likes of Snapchat to boost its native message offering – from emoji-style reactions (hello Facebook), to a Snapchat-style ‘invisible ink’ feature that will see messages obscured in the message preview before the reader ‘unlocks’ it and a doodling feature – there’s a combination of components designed with younger users in mind.

Of course, being a latecomer isn’t as challenging for Apple as it would be for a startup. The revamped app its floating is built into its hardware, giving it a massive scale advantage over something a user would have to seek out and download. It’s also not a surprise it wants to double down on messaging, recent research from eMarketer suggests that UK adults spend an average of two and 24 minutes a day with non-voice mobile activities in 2015, a tally topped only by time spent with traditional TV.

Another reason for Apple to invest in messaging is bots, and with Facebook just recently coming to market with this the tech giant isn’t too much of a latecomer here. While messages sent via messaging apps are poised to double by 2019 to reach 100tn, revenue streams from the current services are set to decline by as much as £600m the same year according to Juniper Research– a loss branded chat bots could help stave off.

Jed Hallam, head of digital strategy at Mindshare UK, agrees that updates to iMessage could see bots become the next frontier for apple, asserting: “As Benedict Evans recently said, the first wave was web, the second wave was apps, and the third wave is likely to be bots. Apple is in a position of strength with regards to hardware and devices, and with the rumoured developments coming to Siri, this would give it strength in Evans’ second and third wave.”

Apple gets into paid search with new app model

What’s crucial to the success (or otherwise) of the recent overhaul to the App Store is the acceptance of them among the developer community. While buy-in from brands is of course important (the halo effect of Apple will likely win over marketers), but it’s the long tail of app developers (a notoriously difficult bunch to please) that will ultimately make or break such initiatives.

We need only cite the iPhone manufacturer’s foray into the advertising world with iAd. This offering initially benefited from Steve Jobs’ midas touch, with brands such as Nissan, et al. buying in to the million dollar-plus campaigns.

However, it was with the long tail of developers (as well as associated media buyers) many of whom were willing to shell out promote their wares that led the kick-back against the onerous demands iAd, and quite simply it didn’t work. Apple’s current leadership will be need to bear this constituency in mind if the recent changes aren’t to be consigned to history along with Apple’s other mishaps such as the Newton and Lisa.

Apple News gets a redesign and supports subscriptions

Apple revealed a redesigned version of Apple News at its WWDC keynote. The new look mirrors more of a newspaper-style homepage, including larger headlines, a trending topics section and featured stories curated by Apple's editors.

Apple is also adding new features to the service like subscriptions and breaking news alerts to address publisher concerns on the fledgling service. Users will for the first time be able to access subscription-only magazines and newspapers on the app, providing users with a one-stop shop to access all their content from one device as well as a new revenue stream for the business and publishers.

Titles sitting behind a paywall such as News UK’s The Times and the Economist have been in talks with Apple since it launched News, to develop a solution that benefits both parties. The changes work to benefit Apple who will receive a revenue share from the titles, and will allow subscription publishers access to large scale audiences that would otherwise be hard to attract.

Chris Duncan, chief customer officer at News UK, said: "We're pleased to see further development of support for publishers who run a subscription based business model in this release. Combined with the changes in iTunes this does suggest Apple see more of their revenues coming from helping publishers grow their subscriber bases which is a benefit for The Times and The Sunday Times.”

New verticals have been added to the For You section, including a trending news section, featured stories submitted by publishers and curated by Apple’s editors, and the topics a user follows. The app also has the ability to create new topic sections based on what a user reads. What's more, the app will now send users breaking news alerts to their lock screens, allowing readers to quickly and easily get the news they need.

On this, Duncan said: "We'll look with interest at how the notifications models develop too as these can be a powerful driver of traffic for The Sun."

Apple trending

To address complaints on the lack of analytics tools on the app, publishers and third party advertisers will also be able to integrate all Apple News advertising capabilities into their existing workflow. The new APIs provide a singular interface and greater efficiency for the key parts of ad operations, including campaign management, creative management and revenue reporting.

The company claims News has 60 million monthly active users and over 2,000 publications. Apple has redesigned both Apple News and Apple Music in bolder colours and simpler formats to create a cohesive appearance across the interfaces.

Apple’s redesign and update to its properties comes in the midst of the biggest fight among tech giants to own the direct interface that people have with content. For Facebook, it’s the newsfeed, for Google it’s the results page, for Amazon it’s their devices. Facebook ramped up its ownership of the content interface with Instant Articles, and this looks to be Apple’s riposte to that.

Jed Hallam, head of digital strategy at Mindshare, said: “The redesign of Apple News will be (as ever) carefully designed to have user experience at its heart, but the real trick will be convincing publishers that Apple News should be their primary destination.”

“After years of playing in their own territories, it finally looks like Google, Apple, Facebook, and Amazon are starting to directly compete. Things are going to get very interesting as the race to own the internet heats up, but the winner will always be those that put people at the heart of their product - the technology doesn’t matter, but Being Human always will.”

Apple to take AI revolution to smartphones

Apple announced sweeping updates to Siri at WWDC, now the voice assistant will be available with third party apps – and on Macs.

With WeChat, Slack, and WhatsApp among the early adopters of the voice assistant now, alongside the introduction of contextual awareness such as location, calendar more) in its predictive text, is Siri finally becoming the assistant we were promised back when she was unveiled to the world in 2011.

Jason Nathan, group managing director for data at Dunnhumby, said that voice assistants have been in the mainstream for many years with “Siri the best known (in no small part due to the withering parody on the Big Bang Theory), but it has fallen behind (Microsoft’s) Cortana and (Amazon’s) Alexa”.

He blamed this on the fact that Siri (until now) only integrated with first party apps: “The ability for third party apps to leverage the service is a big step forward in terms of adoption and engagement.”

On the privacy side, he said there are no real concerns, despite Siri’s new access to third party apps posing a seemingly dangerous out-sourcing of user data. Nathan argued: “Apple users (who essentially pay a premium for privacy) may feel uncomfortable with the implementation of Siri in third party apps”.

Jo Allison, behavioural expert at Canvas8, said consumers on the whole found the “always on” nature of some voice assistants, such as Alexa) as “creepy” arguing “the constant processing of information in the background” invites “your own home to be ‘bugged'.”

On whether mobile users will ever be ok with voice assistants trawling through their third party app data, she said: “Ultimately it’s about use, practicality and acceptance. If it’s good. It works. It’s useful. Especially for people who are busy.

“As early adopters take it up, they begin to set a new norm. Once enough people are doing it, everyone thinks “well if no one else is worried, then why should I be?” It’s this sort of herd behaviour that makes something socially acceptable. This is how privacy issues are overcome,” claimed Allison.

Dan Calladine, head of media futures at Carat Global, naysaid these privacy concerns: “This means that Apple will be getting access to more data, but we can assume that its focus on privacy will remain. Just as your Siri searches are secure and private, we’d assume that user data controlled by Apple in other apps will also be private. But of course as soon as you submit commands to other apps, you then rely on them to use the data responsibly.”

Apple gets serious about music and TV of the future

Apple Music’s redesign presents a far slicker and simpler interface which addresses many of the criticisms directed at it for being needlessly confusing and difficult to navigate.

The overhaul has left the tabs at the bottom of the app largely untouched however each one has received a redesign intended to make it easier to use while also adding new sections.

The ‘For You’ tab includes a slew of new additions such as the ‘Discovery Mix’ which sorts new songs and artists based on previous listening history alongside the daily curated playlists which offer a different feel for each day of the week. Apple has also tried to bring more of a social network to the ‘For You’ tab with the ‘Connect’ section, which shows posts made by the artists a user is following.

The Browse tab now takes on a similar feel to Spotify with the inclusion of ‘Hot Album’ above other options highlighting new music, curated playlists, top charts and genres.

At the company's WWDC conference Apple exec Eddy Cue announced that Apple Music has now amassed 15 million paying subscribers which, while still some way behind Spotify’s 30 million, does mark a turnaround in the downward trend in user growth.

Apple Music users will receive access to the new version of the app with launch of iOS 10 this autumn.

With gaming becoming an increasing focus on Apple TV, the company has moved to address some issues which have been curbing its gaming growth ambitions. No longer will developers have a mandate forcing them to shoehorn in the Siri remote to their games after updated guidelines changed the stance to: “When designing a tvOS game, you may require the use of an MFi game controller, but where possible you should also support the Siri Remote.”

The changes open up the potential to make Apple TV a more serious gaming platform, one where developers are no longer burdened by the task of making complex action titles run with just a few button and a touchpad.

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